Dell to enter cellphone market, plans smartphone with AT&T

ET BureauOct 9, 2009, 02.08am IST

SAN FRANCISCO/HONG KONG: Dell plans to launch a smartphone with Google's Android mobile software on carrier AT&T's network, a source said, marking the PC maker's first foray into a cut-throat US cellphone arena.

Dell will become the latest tech manufacturer to try and establish a footprint in a fast-growing market dominated by Apple and Research in Motion. Its planned phone would also give a boost to Google's fledgling mobile platform, which vies with Apple's and Microsoft's platforms.

A source with direct knowledge of the matter told Reuters Dell plans to introduce a US version of its "oPhone" for China — which runs on Android, and that the device had been certified by AT&T for its domestic network. The Wall Street Journal, which broke the news on Wednesday, cited people briefed on the matter as saying Dell's phone could be launched as soon as early 2010.

Smartphones or cellphones that come with an array of complex functions from email to multimedia, have exploded onto the corporate and consumer market as users increasingly access information and entertainment on the go. Worldwide factory shipments of smart phones are expected to rise to 235.6 million units in 2010, up 27.9% from 184.2 million in 2009, according to iSuppli. That is a far cry from a 12.3% decline projected for cellphones overall in 2009.

But analysts warn that the world's No. 2 PC maker would face a tough challenge in a market already crowded with competition. On Wednesday, South Korea's Samsung said it would also begin selling an Android phone through Sprint Nextel's network. Others including Taiwanese rivals Acer and Asustek Computer are moving into smartphones, which tend to offer higher margins than PCs.

Dell spokesman Andrew Bowins declined comment but said: "We are deeply engaged with our operator partners around the world to deliver mobile broadband enabled computing devices." He added: "We haven't announced anything around voice or Android although we continue to explore opportunities in those areas."